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In a major way, the ski resort now known as Sno Mountain succeeded exactly as its founders intended.

The 2.1-mile access road from the Davis Street interchange of Interstate 81, needed so skiers could reach the resort, opened up Montage Mountain to massive development.

Over the past three decades, the development produced thousands of jobs at major corporate centers, hotels, a golf course, a shopping mall, theaters and restaurants, not to mention the baseball stadium that hosted a Triple-A minor league team and new stadium soon to host a team again.

"As a community development project, I think it was a fabulous success," said Austin Burke, president of the Greater Scranton Chamber of Commerce. "As a ski area business venture, eh, not so much."

Tens of thousands of skiers have glided smoothly down the resorts slopes since its Dec. 15, 1984, opening, but the resort has often resembled the skiers whose trip downhill is less smooth: they fall, right themselves, then ski a little farther only to fall again.

For almost all of its existence, the resort has struggled to stay afloat financially. The reasons given for that vary - construction delays caused by addressing environmental concerns that raised costs, heavy debt, a lack of consistent snow and cold weather, mismanagement.

What is known for sure is the resort's inability to make enough money forced its original owner, the nonprofit Montage Inc., to surrender ownership to Lackawanna County, whose losses eventually led to a sale to private owners.

They fared even worse.

Now, with the resort bound up in U.S. Bankruptcy Court, its future is murky.

Par for the course, the golfers who play on Montage Mountain might say.

Hope for better

"Based on our research and analyses, we believe that there is substantial market potential for the proposed ski area and summer recreational components of the Montage project," accountants from Laventhol & Horwath wrote in a 1981 market study.

Certainly, the organizers hoped so. Their original planning began in the early 1970s with a group of five community leaders, who formed the Montage Steering Committee that eventually morphed into Montage Inc.

With local unemployment frequently in or approaching double digits, the project's goals were worthy. According to a 1977 fact sheet issued by the chamber, the idea was to stimulate the economy, provide an economic climate that encourages private development and increases the region's tax base, provide major recreational facilities to attract tourist and convention dollars and improve the quality of local life.

Interviews in focus groups of people from outside the region found Scranton "was viewed as a tired, old coal-mining town," Mr. Burke said.

"It had a diversified manufacturing base at that time, but that doesn't resonate with anybody," he said. "The only thing they remembered was coal and maybe some railroading from 40, 50 years before. And so the idea was to build something that would give us an identity â¦ (and) modernize the image."

At the time, skiing was a growing rage as baby boomers and skiers tended to come from more affluent backgrounds, he said.

"So if you could develop a ski area, then you could be considered more like the resort areas and upscale areas," Mr. Burke said.

The original plans called for supplementing skiing with a civic arena and a "motor inn," but they never happened because the focus was on the ski resort. That was the key because that justified the access road, said John P. Sweeney, one of the organizers and the resort's first general manager.

Originally, the project was expected to cost about $8.5 million.

In the 1977 fact sheet, Montage officials said the then-Pennsylvania Gas & Water Co. planned to donate 400 acres of land where the resort would be built. The federal Appalachian Regional Commission was reviewing a Lackawanna County application for a $748,000 grant to build the $1.1 million access road.

"Construction of the access roads could begin in late summer or early fall of 1977," the fact sheet says. "The ski-recreational area and civic arena are planned for construction in 1978 and 1979."

Mr. Sweeney, who made a fortune in plastics but also helped developed ski resorts at the Hideout in Lake Twp. and in Vermont and California, said a fellow Montage organizer asked him in late 1975 when it would open.

"And I said, '1978,'â" he said. "And that's because that's how long it takes a private developer, entrepreneur to do something. A couple of years, it gets done."

Montage took longer - a lot longer.

Opposition mounts

About 30 municipal governments across the region, including Luzerne County, passed resolutions supporting opposition to the project. Opponents grew concerned that the transfer of PG&W land and potential further development around the ski resort would pollute the watershed that produced their drinking water.

An opposition group sprang up, Preserve Our Water and Environmental Resources, or POWER. Joined by the Sierra Club, the national environmental advocacy group, they fought the development at every level of government.

They tried to block the road's construction and the land transfer. They argued the land transfer was part of a larger plan by PG&W to sell off its land for development. (Years later, they would gain some affirmation when Southern Union Co., which bought PG&W, sold off 40,000 acres of former watershed, sparking new concerns about drinking-water pollution.)

They asked the Federal Highway Administration to intervene. The administration refused. They fought before the state Public Utility Commission. When the PUC sided with project officials, they appealed to Commonwealth Court.

"They challenged it at every agency that was interested in funding and they went to every court in the state of Pennsylvania, including the Supreme Court, and the federal court system, except the Supreme Court of the United States," Mr. Sweeney said.

Opponents even tried to slow the development with a hare - the snowshoe hare - which they argued would lose its habitat.

"This controversy has really been blown out of proportion," U.S. Fish and Wildlife Service official Rick McCoy said at the time.

Project continues

All the opposition challenges and court appeals failed. The hare survived and so did the Montage project, but Mr. Sweeney said the delays came with a price.

The construction cost ballooned from $8.5 million to $15 million. Interest on tax-free bonds that would underwrite the construction costs had risen from 3 percent to 3.5 percent in 1975 to more than 11 percent by the time construction began.

"Just that situation with the interest rates was very destructive," Mr. Sweeney said. "And the decision had to be made, 'Well, do we do it or do we don't do it?' Well, so much was invested and the road was almost a fait accompli (finished) from a funding standpoint, etc., etc. So we basically said, 'Hey, if we get off to a couple of good winters, we can make it.'â"

Even having a couple of good winters was in doubt. For its first two seasons, the resort lacked "black diamond" slopes, the kind expert skiers crave, Mr. Sweeney said.

"Every ski area has a beginner and intermediate terrain so my wife and kids can certainly have an enjoyable ski area," he said. "But I'm not going to a ski area that doesn't have black diamonds because I won't be challenged. And as the kids get older, they're looking for the black diamonds."

Only through refinancing at lower interest rates and a bit more borrowing was Montage able to open expert slopes. The third year - the winter of 1986-1987 - was its most successful, he said.

"We came damn close that year to making both bond payments," Mr. Sweeney said. "We threw off a lot of cash, but we just couldn't handle 11 and a quarter (percent interest)."

The resort regularly earned enough money to pay for day-to-day operations, but making the bond payments became harder.

That clearly contrasted with multiple privately owned local ski resorts, which open with little fanfare and far fewer financial struggles yearly.

Gregg Confer, the general manager at competing and privately owned Elk Mountain Ski Resort in Susquehanna County, said his resort survives by keeping its debt low.

"With $14 million of debt, I don't know how you can do that," he said.

Private ski resort owners have always bristled at the Montage resort because it was partially subsidized by the government, an advantage no private resort enjoys.

In fact, their trade association spoke out against its construction for that reason.

Mr. Sweeney said privately owned slopes had the advantage of starting long ago when construction and maintenance costs were cheaper and they could gradually build up operations and clientele.

Montage, on the other hand, started out 100 percent funded with borrowing and no private investment that could reduce the borrowing amount, he said.

Mr. Burke believes Montage also suffered from a decline in snowfall after it opened, but Mr. Sweeney dismissed that notion and another longstanding perceived deficiency - that the slopes were built on the wrong side of the mountain, facing too-bright sunlight that either hurt snow-making or turned slopes icy, to skiers' chagrin.

"That's nonsense," he said.

It was the startup debt that thwarted Montage's solvency, he said.

By 1991, lenders were ready to foreclose. Because Lackawanna County had guaranteed the bonds issued to raise money for construction, the county was on the hook to keep making the payments.

County buys resort

In October 1991, county Commissioners Joseph Corcoran, Ray Alberigi and John Senio took a step that they viewed as their only option. Rather than foreclosure and no resort with the county still required to pay on the bonds, the commissioners voted to buy Montage for $14.7 million. The county would borrow money for the purchase, keep it open and run it.

"There weren't any options," former county Administrator Jerry Stanvitch said. "At least you had something for the ($14.7) million. We viewed it basically from two perspectives. One, that it was part of our parks and recreation system and that you weren't overly concerned with it making money. It's something that adds to the quality of life in the community. We always viewed it as something for local residents. We know that if you're running parks, they're not money-makers."

For 15 years, the county ran the ski resort, losing money most of the time. Overall, as of 2001, it had lost more than $2.8 million over its first decade under county ownership, county officials said at the time.

In 2001, county officials announced Montage earned a profit for the first time in seven years, but they used a bit of creative accounting. They counted money made from summertime concerts at the nearby Montage Mountain Performing Arts Center, which was technically a separate legal entity. Republican minority Commissioner Robert C. Cordaro railed at the fused accounting.

Officials in Mr. Corcoran's administration urged patience, contending the ski resort would consistently earn profits once its annual $1.4 million bond payments ended in 2011, but in 2003 Mr. Cordaro and fellow Republican A.J. Munchak won majority control of the commissioners office.

Long believing the resort was an unnecessary drain on county coffers, they put it up for sale. In November 2006, the county sold the resort and its 388.94 acres to its present owner, SnÃ¶ Mountain, a partnership of Philadelphia area businessmen, for $5.1 million.

Lackawanna County Commissioner Mike Washo forced the price upward by getting another company, Snow Time Inc. of York County, to offer $5 million after SnÃ¶ Mountain offered only $4.1 million.

"Government has no business in business," he said.

SnÃ¶ Mountain officials promised $20 million of investment. With a $5 million state loan, they upgraded the resort's snow-making system and embarked on construction of a $9.5 million water park.

All wet?

Mr. Confer, the Elk Mountain manager, marveled at the new owners' decision to add debt to open the water park amid heavy competition from the established water park at Camelback Mountain Resort in Monroe County.

A summertime recreational use, including a water slide, was part of the original plans for Montage, and the original owners eventually installed a slide.

Mr. Sweeney called that one of his biggest mistakes. He wanted to install a "wave pool," a new concept at the time, but consultants recommended a water slide, which already existed elsewhere in the region.

"There was no wave pool anywhere," he said. "We would have been the first."

The water slide didn't produce enough revenue.

After several delays tied to acquiring financing, Sno Mountain opened its water park in July 2009, featuring an elaborate group of attractions.

Its revenues never covered all the resort's debts.

Mr. Washo questioned whether Sno Mountain's owners had the expertise in running a resort area and whether a ski resort so heavily in debt could make it in an area with an aging population and stagnant in size.

"They had never run one before," he said. "Snow Time had people that knew how to do it, that were in this business."

As it turned out, a secret investor in Sno Mountain was funeral director Al Hughes, a one-time close friend of Mr. Cordaro. At the ex-commissioner's corruption trial in June 2011, Mr. Hughes testified to arranging hundreds of thousands of dollars in payments to Mr. Cordaro by contractors unrelated to the Montage deal.

No one accused Mr. Cordaro of profiting from the ski resort sale. Mr. Cordaro is serving an 11-year prison sentence after his conviction on other corruption charges.

Bankruptcy threats

In late October, Sno Mountain's investors, claiming they are owed more than $9.6 million, attempted to force the firm into bankruptcy protection proceedings while a bank claims its is owed $8.6 million.

The bankruptcy case remains pending and Sno Mountain officials say they remain committed to reopening for skiing later this month. Its opening date remains unclear while other resorts are already open.

Mr. Sweeney and Mr. Burke remain convinced that someday the ski resort will work. Mr. Sweeney said it requires an operator with enough cash to survive tough times.

Both men say it has served its chief purpose anyway: spurring economic development.

"You have the trails all cut; you have the snowmaking equipment there. You have all of the summer stuff like the wave pools, the zip lines, they're still there. They just have to fire them up and get them going," Mr. Burke said. "Bought at the right price so you have the right capital structure, it'll be a great asset. I think somebody is going to make good money on Montage, and I think it's going to be a good tourist/economic engine for us."

Contact the writer: bkrawczeniuk@timesshamrock.com

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